Evening Headlines
Bloomberg:
- Greek Crisis Evasion to Fore as Merkel Hosts Hollande in Berlin. Chancellor Angela Merkel hosts President Francois Hollande today as officials look for ways to stave off an immediate crisis after a report due next month from Greece’s international creditors on the health of its finances. Options raised in Germany in recent days include front- loading aid payments to Greece to help it over liquidity hurdles; lowering the interest rate or extending maturities on loans; and pushing for a second debt writedown, this time focusing on bonds held by public institutions, notably the European Central Bank. With the leaders of Europe’s two biggest economies still at the confidence-building stage, Merkel and Hollande are seeking common ground on Greece and the wider euro-area debt crisis almost three years after its inception. While Merkel publicly stresses meeting targets, France sees them as too harsh given the state of the Greek economy, a French government official said on condition of anonymity because the talks are private. Merkel and Hollande will give statements at 7 p.m. in Berlin.
- China’s Stocks Reverse Earlier Gains on Manufacturing Concerns. China’s stocks fell, wiping out the benchmark index’s gains, after a report showed the nation’s manufacturing may contract at a faster pace this month. China Vanke Co. led declines for property developers after Vice Premier Li Keqiang called for local governments to continue property-market tightening measures. Shandong Gold Mining Co. paced gains for bullion producers as gold prices surged to a 16- week high after minutes from a U.S. Federal Reserve meeting showed many policy makers favored more monetary easing. The preliminary reading of 47.8 for a purchasing managers’ index released by HSBC Holdings Plc and Markit Economics today compares with a final 49.3 for July. A number below 50 indicates contraction.
- Beef Herd Tumbles to 40-Year Low on Feed Cost Surge: Commodities. The worst U.S. drought in a half century and record feed prices are spurring farmers to shrink cattle herds to the smallest in two generations, driving beef prices higher. Beef output will slump to a nine-year low in 2013 after drought damaged pastures from Missouri to Montana, the U.S. Department of Agriculture estimates. The domestic herd is now the smallest since at least 1973, and retail prices reached a record last month, USDA data show. Cattle futures may rise 8.5 percent to an all-time high of $1.35 a pound in Chicago in the next 12 months, said Rich Nelson, the chief strategist at Allendale Inc. who has tracked the market for 15 years.
- Oil Gains a Third Day on Falling U.S. Stockpiles, Fed Stimulus Hopes. Oil rose for a third day in New York after U.S. stockpiles declined more than analysts projected and minutes from the Federal Reserve showed many policy makers backed more monetary easing. “We had pretty supportive news for commodity markets from the Fed,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The wording was explicit and it seems likely that there is going to be easing. Oil for October delivery gained as much as 67 cents to $97.93 a barrel in electronic trading on the New York Mercantile Exchange and was at $97.90 at 11:36 a.m. Sydney time. The contract yesterday climbed 0.4 percent to $97.26, the highest close since May 7. Prices are 1 percent lower this year. Brent oil for October settlement gained 77 cents, or 0.7 percent, to $115.68 a barrel on the London-based ICE Futures Europe exchange.
- Gold Climbs to 16-Week High on U.S. Stimulus Bets.
- U.S. Budget Deficit to Reach $1.1 Trillion in 2012, CBO Says.
- The Cliff the Keynesians Built. Temporary tax cuts created the fiscal threat to growth.
- U.S. Plans New Asia Missile Defenses. The U.S. is planning a major expansion of missile defenses in Asia, a move American officials say is designed to contain threats from North Korea, but one that could also be used to counter China's military. The planned buildup is part of a defensive array that could cover large swaths of Asia, with a new radar in southern Japan and possibly another in Southeast Asia tied to missile-defense ships and land-based interceptors.
MarketWatch:
- DRAM chip prices reported falling faster in August. Prices for DRAM chips are falling at a faster rate amid a lack of recovery for personal-computer sales, with Japan's Nikkei business daily Thursday quoting an unnamed official at a major DRAM maker as saying buyers drastically cut their procurement plans this month. Prices for mainline 2-gigabit DRAMs hit a five-month low in the first half of August, dropping 9% from their recent late-June high, the report said. While DRAM demand usually picks up in September ahead of the year-end shopping season, some major PC makers are apparently holding back on their purchases due to large inventory levels, prompting the price cuts, the report said.
Business Insider:
- The 45 Stocks That Big Hedge Funds Love The Most.
- Coal-Fired Power Plants Are Shutting Down In Record Numbers.
- CITI: 5 Reasons India's GDP Growth Is Heading To A 10-Year Low.
- There Are Signs India's State-Owned Banks Are In Trouble.
Zero Hedge:
- Citi Sees Greek Exit As Soon As September.
- Marc Faber On Keynesian Folly, The 'Missing' Inflation, And Bubble-Blowing.
- China Flash PMI Plummets As New Export Orders Collapse To Lehman Lows. (graph)
CNBC:
- Chinese Acquisitions in US Near Record. Chinese acquisitions of US assets and businesses are running at record levels this year, bucking the trend of a generally tough mergers and acquisitions market and a sign that it is easier than many think for Chinese companies to attain approval for deals in America.
- Hewlett-Packard(HPQ) Earnings Beat but Revenue Is Light. Hewlett-Packard reported quarterly earnings that beat Wall Street's expectations, but its revenue came in below estimates on Wednesday.
- Citigroup(C) Slams Nasdaq's(NDAQ) Facebook(FB) Compensation Plan.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows Mitt Romney attracting support from 46% of voters nationwide, while President Obama earns the vote from 44%. Five percent (5%) prefer some other candidate, and five percent (5%) are undecided.
- Australia declares resources boom has peaked. Australia declared the top of the resources boom, which had cushioned the country against the global financial crisis, a day after the world's biggest miner BHP Billiton shelved two major expansion plans worth at least $40 billion. One minister went as far as calling the end of the resources boom, but later rowed back to say commodity prices had peaked while investments in multi-billion dollar projects would continue, especially in the energy sector.
- International Rectifier(IRF) sees weak 1st-qtr revenue, shares fall. Semiconductor maker International Rectifier Corp posted a quarterly loss and forecast first-quarter revenue well below analysts' expectations on slowing demand for its power management chips.
- US, Pakistan must 'divorce' as allies, ex-Pakistan envoy says. The United States and Pakistan should stop pretending they are allies and amicably "divorce," Pakistan's former ambassador to Washington said on Wednesday, citing unrealistic expectations in both countries that include U.S. hopes Islamabad will sever its links to extremists. "If in 65 years, you haven't been able to find sufficient common ground to live together, and you had three separations and four reaffirmations of marriage, then maybe the better way is to find friendship outside of the marital bond," Husain Haqqani said, addressing the Center for the National Interest, a Washington think tank.
Financial Times:
- Moore Capital echoes macro funds’ woes. When Greg Coffey goes on holiday, the 42-year-old Australian trading star at hedge fund Moore Capital Management takes his work with him – in a very literal sense. Once he checks out of Moore’s offices in the posh Mayfair district of London, a team of technicians starts to dismantle his workstation.
Xinhua:
- Chinese Vice Premier Li Keqiang called for local governments to continue property market tightening measures and speculation curbs, citing the official.
Wells Fargo:
- Rated (GNC) and (WFM) Outperform.
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 147.0 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 127.5 +4.75 basis points.
- FTSE-100 futures +.39%.
- S&P 500 futures +.32%.
- NASDAQ 100 futures +.32%.
Earnings of Note
Company/Estimate
- (HRL)/.41
- (FRED)/.17
- (PDCO)/.49
- (BIG)/.42
- (TTC)/.62
- (MCRS)/.60
- (ADSK)/.49
- (ARUN)/.17
- (SCVL)/.11
- (CRM)/.39
- (RUE)/.34
8:30 am EST
- Initial Jobless Claims are estimated to fall to 365K versus 366K the prior week.
- Continuing Claims are estimated to fall to 3300K versus 3305K prior.
8:58 am EST
- Preliminary Markit US PMI for August is estimated at 51.5.
10:00 am EST
- New Home Sales for July are estimated to rise to 365K versus 350K in June.
- The 2Q House Price Index is estimated to rise +2.6% versus a +.6% gain in 1Q.
Upcoming Splits
- None of note
Other Potential Market Movers
- The Merkel/Hollande meeting, German GDP data, Eurozone PMI data, 10Y TIPS auction, weekly EIA natural gas inventory report and the weekly Bloomberg Consumer Comfort Index could also impact trading today.
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